Washington Couple Sentenced to Prison for 20-Year Disability Fraud Scheme

RONNIE GEORGE, 50, and NANCY STONE, 45, both of Kent, Washington,were each sentenced today in U.S. District Court in Seattle to two years in prison and three years of supervised release for a long-running scheme to defraud both the Social Security Administration and state social welfare programs.  GEORGE was ordered to pay $315,318 in restitution and STONE was found to be jointly responsible for $275,965 of the restitution.  At sentencing U.S. District Judge Thomas S. Zilly said the long running scheme, defrauded four agencies of substantial money.  Judge Zilly noted that the couple renewed their fraudulent claims on a monthly basis to get money from state social programs.  Judge Zilly said the couple had been “stealing benefits… eliminating benefits for some people who truly were in need.”

The couple pleaded guilty to Social Security Fraud on October 14, 2011.  According to the plea agreement, beginning in 1990, RONNIE GEORGE posed as mentally disabled in order to obtain Social Security benefits.  On his application materials, GEORGE claimed his friends took care of his daily needs such as dressing, shopping and cooking.  He indicated on the form that he “watched Sesame Street” and played with toys such as “my cars and cowboys and G.I. Joes.”  In 1999, the couple again filled out affirmations that GEORGE was disabled.  NANCY STONE claimed he could not work or drive.  In 2009, GEORGE filed another form claiming he had “never worked.”  In April 2010, at an interview with a Social Security Administration representative, the couple misrepresented their relationship, claiming that STONE was a caregiver, not GEORGE’s common-law wife, and that GEORGE had never worked.  The couple also recruited their son, then a minor, to further falsely verify that GEORGE was disabled.

In fact, while claiming disability, GEORGE and STONE ran a successful business buying and selling vehicles and RVs.  GEORGE purchased vehicles at auction, worked on them mechanically, and negotiated sales with buyers. 

In addition to fraudulently collecting more than $139,000 in Social Security disability benefits between 1990, and July 2011, the couple also illegally collected medical, housing and caregiver benefits.  NANCY STONE was paid more than $150,000 by the Washington State Department of Social and Health Services (DSHS) based on the couple’s representations that STONE was a caregiver for the supposedly disabled GEORGE.  The couple also collected more than $10,000 from DSHS for GEORGE’S medical bills.  Between January 2010 and July 2011, they collected another $14,000 from the U.S. Department of Housing and Urban Development (HUD) for housing assistance to which they were not entitled.

In their request for a sentence at the top of the guidelines range, prosecutors argued that the 20 year fraud damaged the safety net meant for our poorest citizens. “The defendants stole from programs intended to assist the poor. In so doing, they robbed the truly needy of scarce resources. In addition to the substantial direct costs on the program, fraud of this nature drives up the administrative costs of social welfare programs by requiring the expensive measures to detect and prosecute fraud.  This type of conduct also causes public cynicism about social welfare programs, undermining support for programs needed by the poor.  In all of these ways, defendants’ offenses interfered with society’s ability to deliver resources to the destitute.  They should be regarded as crimes against the poor and punished accordingly,” prosecutors wrote in their sentencing memo.

The case is one of a number of disability fraud cases filed in U.S. District Court in the Western District of Washington this year.  The cases are being investigated by the Social Security Office of Inspector General (SSA-OIG) with assistance from the Washington State Patrol, the Washington State Department of Social and Health Services Office of Fraud and Accountability, the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG), the U.S. Marshals Service, and the Washington State Department of Licensing Fraud Investigation Unit.

The cases are being prosecuted by Assistant United States Attorney Mary K. Dimke and Special Assistant United States Attorney Seth Wilkinson.  Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute Social Security fraud in federal court.RONNIE GEORGE, 50, and NANCY STONE, 45, both of Kent, Washington,were each sentenced today in U.S. District Court in Seattle to two years in prison and three years of supervised release for a long-running scheme to defraud both the Social Security Administration and state social welfare programs.  GEORGE was ordered to pay $315,318 in restitution and STONE was found to be jointly responsible for $275,965 of the restitution.  At sentencing U.S. District Judge Thomas S. Zilly said the long running scheme, defrauded four agencies of substantial money.  Judge Zilly noted that the couple renewed their fraudulent claims on a monthly basis to get money from state social programs.  Judge Zilly said the couple had been “stealing benefits… eliminating benefits for some people who truly were in need.”

The couple pleaded guilty to Social Security Fraud on October 14, 2011.  According to the plea agreement, beginning in 1990, RONNIE GEORGE posed as mentally disabled in order to obtain Social Security benefits.  On his application materials, GEORGE claimed his friends took care of his daily needs such as dressing, shopping and cooking.  He indicated on the form that he “watched Sesame Street” and played with toys such as “my cars and cowboys and G.I. Joes.”  In 1999, the couple again filled out affirmations that GEORGE was disabled.  NANCY STONE claimed he could not work or drive.  In 2009, GEORGE filed another form claiming he had “never worked.”  In April 2010, at an interview with a Social Security Administration representative, the couple misrepresented their relationship, claiming that STONE was a caregiver, not GEORGE’s common-law wife, and that GEORGE had never worked.  The couple also recruited their son, then a minor, to further falsely verify that GEORGE was disabled.

In fact, while claiming disability, GEORGE and STONE ran a successful business buying and selling vehicles and RVs.  GEORGE purchased vehicles at auction, worked on them mechanically, and negotiated sales with buyers. 

In addition to fraudulently collecting more than $139,000 in Social Security disability benefits between 1990, and July 2011, the couple also illegally collected medical, housing and caregiver benefits.  NANCY STONE was paid more than $150,000 by the Washington State Department of Social and Health Services (DSHS) based on the couple’s representations that STONE was a caregiver for the supposedly disabled GEORGE.  The couple also collected more than $10,000 from DSHS for GEORGE’S medical bills.  Between January 2010 and July 2011, they collected another $14,000 from the U.S. Department of Housing and Urban Development (HUD) for housing assistance to which they were not entitled.

In their request for a sentence at the top of the guidelines range, prosecutors argued that the 20 year fraud damaged the safety net meant for our poorest citizens. “The defendants stole from programs intended to assist the poor. In so doing, they robbed the truly needy of scarce resources. In addition to the substantial direct costs on the program, fraud of this nature drives up the administrative costs of social welfare programs by requiring the expensive measures to detect and prosecute fraud.  This type of conduct also causes public cynicism about social welfare programs, undermining support for programs needed by the poor.  In all of these ways, defendants’ offenses interfered with society’s ability to deliver resources to the destitute.  They should be regarded as crimes against the poor and punished accordingly,” prosecutors wrote in their sentencing memo.

The case is one of a number of disability fraud cases filed in U.S. District Court in the Western District of Washington this year.  The cases are being investigated by the Social Security Office of Inspector General (SSA-OIG) with assistance from the Washington State Patrol, the Washington State Department of Social and Health Services Office of Fraud and Accountability, the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG), the U.S. Marshals Service, and the Washington State Department of Licensing Fraud Investigation Unit.

The cases are being prosecuted by Assistant United States Attorney Mary K. Dimke and Special Assistant United States Attorney Seth Wilkinson.  Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute Social Security fraud in federal court.